What’s up guys! It’s Jason here and welcome to my YouTube channel, Company Insight.
I’m sure you’ve heard about In-N-Out or have been to one of their locations. In fact,
in my humble opinion, In-N-Out Burger is a MUST-SEE stop for most foodies,
and tourists to California and the West Coast in general. Since its founding in California in 1948,
In-N-Out Burger has, as its name suggests, built its almost cult-like following by upholding its
original premise: customers should be able to quickly drive in and out of its strategically
placed locations to order its select, limited menu items without sacrificing the quality
of the food or paying a premium. In this video, I’ll run you through the secrets how did In-N-Out
get so popular and what makes this burger shop so special. By the end, I guarantee you’ll be an
In-N-Out burger expert and want to head over to the nearest In-N-Out closest to you!
But first, I need a quick favor from you. If you wouldn’t mind just hitting that LIKE button
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Thanks for doing that and now let us continue on with What Makes In-N-Out burger so successful.
Seizing Opportunity Interesting fact. Did you
know…The California-based chain is credited with being the first to use a drive-thru,
two-way speaker to place orders. How did it come about? Company lore has it that Harry Snyder,
one half of the founders, connected the dots with the advent of personal car ownership and
the long stretches of highway that were coming into being in the 1940s and 1950s.
As more and more people began to drive on California highways for stretches at a time,
Snyder made a big bet: those people would need to eat. Snyder and his wife, Esther, the other
co-founder of In-N-Out Burger, decided to utilize two-way radios for their drive-thru orders.
Prior to their connecting the two-way radio with fast food, carhops took people’s orders and
also brought them out to customers in their cars. In-N-Out still uses carhops for the personal touch
and human interaction, which has become a novelty in itself as more customers use mobile ordering.
Bet you didn’t know that prior to today! What Makes In-N-Out Special?
In-N-Out Burger has managed to come out on top despite different food trends and changing
consumer tastes, at least partially because of its commitment to maintaining its brand.
There’s a keen sense of what makes In-N-Out Burger In-N-Out Burger.
So who owns In and Out Burger? Always privately owned, the company has passed down from Harry
and Esther Snyder, to their only grandchild, Lynsi Snyder, today. Being a private company,
In-N-Out Burger has no obligation to disclose its financial success or mishaps,
but in 2018, Forbes reported that a typical In-N-Out Burger store brings in approximately
$4.5 million in gross annual sales, compared to McDonald’s $2.6 million. Is In-N-Out profitable?
That’s almost double McDonald’s sales...and McDonald’s golden arches are pretty much everywhere
in the United States and internationally, versus In-N-Out’s rather limited number of stores,
most of which are on the West Coast. With those metrics, they’re definitely profitable!
Given that In-N-Out Burger has so few stores in comparison to other fast food behemoths such as
Burger King and Shake Shack, why does In-N-Out Burger still do such remarkably good business?
It can be attributed to several key factors, the first of which is that there are,
in fact, very few stores. Let’s break it down to see the difference: In-N-Out has 358 locations,
while McDonald’s has 13,837 stores as of 2019, Five Guys has 1,500, and Chick-fil-A has 2,605.
This answers one of the questions - Why is In-n-out always crowded. The limited locations
helps to give In-N-Out Burger further cache as a must-stop on the West Coast and helps it to
maintain its brand integrity. Today, In-N-Out is not only in California but also in Arizona,
Nevada, Oregon, Texas, Utah, Colorado and Idaho. Since it’s not everywhere,
it’s a special treat and a bit more premium than McDonald’s. The exclusivity of the brand is a key
selling point that makes it synonymous with a California vibe. It’s similar to
how Krispy Kreme started until they sold out and opened over 1,000 stores everywhere.
What are the secret menu items at In N Out? In-N-Out has practically confirmed the
importance of the exclusivity factor to its brand by including its “Secret Menu�
as the “Not So Secret Menu” on its website. By doing so, In-N-Out acknowledges its cult-like
following that had created a word-of-mouth menu that included variations on its three main items,
as well as additional items such as a grilled cheese sandwich, sandwich wrapped in lettuce
rather than a bun, and an “Animal Style” burger that is reportedly rooted in 1960s SoCal folklore.
Apparently, even then, In-N-Out was popular with surfers who requested their patties be cooked
with mustard and extra spread with their onions grilled and pickles on top. The more tousled look
of the surfers led the uniformed In-N-Out clerks to describe their orders as “Animal Style.” And so
another part of the legend was born. HMmm.. Just describing these burgers makes me so hungry!
Additionally, In-N-Out Burger owns the majority of its properties, which reportedly helps it “cut
an estimated 6% to 10% of total costs.” Unlike other fast casual or fast food chains, In-N-Out
has made the conscious decision to not franchise its business for the sake of quality control.
Locations are chosen for their proximity to highways, rather than their proximity
to urban centers, because the family-owned business maintains its tradition of ensuring
the freshness of their food. The company boasts a no microwave and no heater policy,
with all the locations within 500 miles of their beef patty making facilities.
Yes, In-N-Out Burger makes their own beef patties, which brings me onto my next point…
Quality Over Quantity How did In-n-Out get so popular?
It’s not one magic secret but many. It starts with quality. The quality over quantity approach
informs In-N-Out Burger’s historical commitment, to this day; to DIY as much of its business as
possible to ensure that everything meets its high standard. In the long run, it saves the business
money as well, increasing its profit margin. The founders of In-N-Out started this start-up like
approach of being scrappy by butchering their own meat, rather than buying more expensive, pre-cut
meat, even going as far as establishing their own wholesaling company to buy paper supplies
in bulk at cheaper prices, as well as building new locations with their own construction workers.
Interestingly, the origins of In-N-Out Burger could be a tale of two different paths to success.
While early on, McDonalds tried to figure out ways to cut costs and ultimately sacrificed the
quality of their food to become many Americans� go-to budget meal, In-N-Out Burger’s founders
were obsessed with keeping as much of the chain’s operations in-house, as possible. If you haven’t
been, you must wonder why does In-N-Out taste so good. As In-N-Out packaging still notes today,
in contrast to the processed and synthetic, filler ingredients found at lower-quality chains,
the beef patties are truly fresh, the fries made from freshly cut potatoes with sunseed oil only,
and the milkshakes are made of real ice cream. The focus on “real” food may seem ridiculous,
but does anyone remember when a Utah man went on television to showcase a McDonald hamburger that
he had left in his cabinet for fourteen years? And the result was that the hamburger looked
totally...unchanged? Spooky, but it goes to show just how mainstream non-real food engineered to be
almost evergreen, has become. For anyone who actually knows what I’m talking about or googles
it, it may make you appreciate In-N-Out Burger anymore. In-N-Out is literally the only fast
food hamburger that looks that way in real life the way it looks in the commercials!
Even today, it’s incredible to stop and realize that throughout the approximately 30 years of
its history, one of its signature double patty burgers, the “Double-Double” is priced at lower
than the rate of inflation. Forbes pointed out that in 1989, the Double-Double was $2.15,
which factoring the rate of inflation, would now cost a little more than double at $4.40.
Money printer go Brrrr While it should cost $4.40, it’s actually $3.85. Consumers are
definitely getting a bargain and one of the main reasons is because the company continues to buy
ingredients wholesale and does modifications on their own, such as continuing to use their
own facilities and workers to grind beef. It is estimated to save the company between 3-5% in
food annually. Given that the menu has only a few items to this day, including the Double-Double,
cheeseburger, hamburger, french fries, shakes, and fountain drinks, In-N-Out Burger has to source
relatively limited ingredients. With its limited menu, In-N-Out Burger can focus on quality,
rather than trying to offer a multitude of products with some hit-or-miss items.
Understanding Its Place As a quick history of In-N-Out,
Lynsi Snyder’s willingness to understand In-N-Out Burger’s place in the grand scheme of fast-food
chains continues to contribute to its success. Snyder and her team accept that In-N-Out has
stiff competition on the East Coast, with chains such as Shake Shack and Five Guys, in addition
to the ubiquitous McDonalds, Burger Kings, and Wendy’s. Snyder herself told Forbes that, “I don’t
see us stretched across the whole U.S. I don’t see us in every state. I like that we’re sought after
when someone’s coming into town. I like that we’re unique. That we’re not on every corner.” In-N-Out
endears itself with customers because it’s like a slice of Americana, with its red and white,
tiled interiors, and associates in paper hats who still take customers’ drive-thru orders.
Family touches, such as the printing of Christian verses on its food packaging since 1987,
sets In-N-Out apart from other fast food chains, who tend to distance themselves from religion and
other topics controversial in the United States. Religion is still a hot topic throughout the
country, but rather than shy away from it, Snyder has embraced it as a small and discreet touch that
is the hallmark of a family business. Staying Private to Keep Their Identity
Snyder, her parents, and her grandparents, the founders of In-N-Out,
have all been committed to keeping the company private. In an interview with CBS,
Snyder adamantly declared that the company will “never” go public, nor franchise its restaurants.
She clarified that, “The only reason we would do that is for the money, and I wouldn’t do it.�
Both options are extremely popular with comparable chains because of their financial benefits.
Household food and beverage chains ranging from McDonalds to Chipotle to Starbucks have gone
public in order to reap all the benefits of being listed on the stock exchange, such as receiving a
cash infusion by selling shares. By franchising, which Chick-Fil-A does for instance, according to
notoriously difficult criteria resulting in 0.4% of applicants being picked, In-N-Out could also
raise cash instantly. However, the downsides of going public and franchising are quite similar:
losing control of quality and a family atmosphere that has made In-N-Out Burger famous.
As part of that family atmosphere, In-N-Out Burger strives to pay their part-time associates
and really all employees, a competitive wage. Unlike the minimum wage that differs by states and
is paid by most fast food chains, In-N-Out Burger pays $13 an hour. Even for part-time associates,
the company offers benefits, including dental, vision, basic life, and voluntary life insurance
coverage, as well as an associate assistance program. Despite being at more than 10,000
employees, on employer rating site, Glassdoor, Lynsi Snyder famously garners a 95% CEO approval
rating. This is quite unusual given that fast food workers are often in the news complaining
about barely livable wages in the corporate race to the bottom, to see who will work the most for
as little as possible. For consumers who do care about the ethics of the companies they support,
In-N-Out Burger’s success in this regard sets them head and shoulders above their competitors.
Celebrity Credibility If delicious food at a reasonable
price wasn’t enough of a reason to love In-N-Out Burger, perhaps the many celebrity endorsements
could do the trick. Some of the most famous and esteemed figures in the food world, for example,
have spoken publicly about In-N-Out being a must-stop whenever they’re on the West Coast.
Now deceased Anthony Bourdain had explained, “It’s the only fast-food chain that I actually
like, and think is reasonably good for the world.� Chef and owner of the Momofuku restaurant group
also begrudgingly proclaimed, “I will admit that there is a time and place for these things.
If consumed right away, an Animal Style burger at In-N-Out Burger is a beautiful thing.�
Personally, I would change that quote to…Jason at Company Insight proclaims,
“I will admit that there is ALWAYS a time and place for these things.
If consumed right away, an Animal Style burger at In-N-Out Burger is a HEAVENLY thing.�
With those famous chefs proclaiming their love for In-N-Out Burger,
is it any surprise that when Paris Hilton was pulled over for her infamous DUI in 2006,
she claimed she, “just wanted some In-N-Out.� We don’t condone driving under the influence,
ever, but it does go to show the sway that In-N-Out burger has over some of
its most ardent fans. Personal Testimonial
If you haven’t figured out already, I love In-N-Out. The In-N-Out success story is the
epitome of the American dream of making a great business with a great product.
As a huge fan of In-N-Out Burger myself, I recommend that anyone who hasn’t tried it yet,
try it as soon as they get the chance. I’ve personally visited several locations in and
just outside of Los Angeles. I haven’t had a bad experience yet, and I’ve tried literally
everything on the menu, Animal Style included. Depending on how messy of an eater you are,
Animal Style, laden with sauce, may not be your thing. Regardless, the freshness of the products,
excellent customer service, and retro aesthetic are not to be missed. You won’t regret it!
So with that said, thank you so much for watching my video. There was a significant
amount of research and production that went into making this video possible. As this is a brand-new
YouTube channel I just started this year - if you enjoy videos like this, please click the
subscribe button and hit that notification bell! The more subscribers we get the better and the
more content I can continue making. Subscribe. Subscribe. Subscribe! Have you tried Shake Shack
before? Did watching this video make you hungry? Be sure to check out some of my other videos, like
the Rise and Fall of New York and for foodies, the Rise and Fall of Rainforest Cafe. As always,
stay happy and healthy and stay tuned for another episode of Company Insight next week.